Many responsibilities come with being a Property Manager. It’s not just about finding great tenants and collecting the rent. Managing property maintenance and repairs is an ongoing job. Failure to do regular maintenance as instructed by the landlord or failure to act when emergency repairs are needed can result in lawsuits. You could face legal action from your client — the landlord — or the tenants (or both).
In this blog, we’ll look at what can go wrong and what you can do as a Property Manager to minimize the risks.
What could go wrong?
Untimely Property Deterioration Due to Lack of Maintenance
Landlords entrust their property with a Property Manager and expect that any maintenance and repairs they request are done in a timely manner. Regular property maintenance can include annual air-conditioning servicing, termite checks, pest control measures, gutter cleaning, or even cleaning solar panels. While Property Managers aren’t expected to do the maintenance themselves, they are typically responsible for liaising with the tenants and licensed contractors, arranging access to the property, and ensuring it’s done.
If a Property Manager lets a landlord down and doesn’t do the required maintenance, it can lead to the untimely deterioration of the property. For example, the build-up from an uncleaned gutter can cause leaks inside the property due to inadequate drainage. Similarly, failure to organize a termite treatment could potentially lead to structural damage to the home.
With untimely property deterioration comes costly repairs for landlords. If it’s due to your failure to act properly as a Property Manager, they may sue you for negligence to recover damages.
Tenant Injury, Illness (or Even Death)
Properties can be repaired, but if a lack of maintenance or attention to repairs results in injury, illness, or loss of life, this is a serious matter. Property Managers could be sued for negligence or face criminal charges if this happens.
Watch out for major leaks that could cause mold if left unchecked. Any kind of fungal growth can be hazardous to occupants. The spores of mold — especially black mold — can cause respiratory infections, rashes, and other health conditions. They can also exacerbate symptoms for occupants with existing health issues, such as asthma.
Property Managers should ensure that all emergency repairs are completed swiftly to avoid any collapsing hazards. For example, if there is a large storm and a ceiling has partially collapsed or a pergola has fallen over. As soon as it’s safe to do so, emergency repairs should be undertaken to make the property safe.
Failure to fix leaks or reported electrical issues can result in electrical fires. This can lead to injury or loss of life, so any reported issues must be fixed promptly.
According to the U.S. Fire Administration, three out of five fire deaths result from property fires where there are no working smoke alarms. They say the risk of a person dying in a home fire is cut in half in homes with working smoke alarms. If a tenant reports a problem with a smoke alarm, this is an urgent matter.
It should be spelled out in tenancy lease agreements who is responsible for the regular testing and changing of batteries for smoke alarms. Typically this is a tenant responsibility because otherwise, the landlord would need monthly access to the property (which most tenants won’t want to agree to). However, anything fundamentally wrong with a smoke detector needs to be fixed by the landlord. If a tenant tests the smoke alarm and it’s not working, and they report the issue to their Property Manager, this is an urgent priority. By law, a landlord must ensure there are working smoke alarms in the rental property.
Damage to Tenant’s Property
If your failure to do maintenance and repairs results in a tenant’s personal property being damaged, you may find yourself facing a lawsuit. For example, if a leaky pipe isn’t fixed in a timely manner and it bursts and destroys their furniture and belongings.
If a tenant reports a security issue, such as a broken lock, window or door, this is a priority issue that needs to be fixed. Failure to do so could make the property vulnerable to break-ins, which could lead to further property damage or potential danger to the tenants.
How to Minimize Your Risk of a Lawsuit
Triage Maintenance and Repairs and Ensure Everything Gets Done Promptly
Think of maintenance and repair requests like you would triage at the hospital. What are the high-risk issues that need to be addressed first? Where there are property and maintenance issues that could result in injury, illness, or loss of life, you need to prioritize these first. For other maintenance issues, the timeframe may be more flexible, but they still need to be done.
Good Recordkeeping is Key
Ensure your property records are up to date and keep track of any contact you have with tenants, licensed contractors, and landlords. If you do find yourself amidst a lawsuit claim, you can refer to your records to confirm exactly what you did and when. This can be especially important if you are accused of negligence.
Record any incidents and have a policy in place to expedite any emergency repairs that could endanger life.
Insurance is a valuable asset for any Property Manager. CRES Property Manager E&O + ClaimPrevent® insurance can help you to defend a lawsuit if you’re sued by a client or a tenant. CRES also offers access to qualified real estate attorneyspre-claim. This means you can speak to a professional about legal matters whenever you need it.
CRES has access to more Property Manager Errors and Omissions options than just about anyone (we’re part of one of the largest insurance brokers in the world). Let us find you the best coverage at the best price. Contact the CRES team at 800-880-2747 for a confidential discussion today so we can customize a policy just for you.